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Affordable condos lure new market of buyers

Bill Lewis, For The Tennessean
9:17 p.m. CDT August 24, 2014

Developers Kristin Hostettler, 28, and her brother Will Hostettler, 24, at the new Park at Melrose Heights, located on an emerging stretch of Nolensville Pike between I-440 and the Tennessee State Fairgrounds. Prices start at $95,000 for a 550-square-foot studio residence.
(Photo:
Mark Zaleski / The Tennessean
)

When developer Kristen Hostettler decided to offer new condominiums near downtown Nashville for $95,000, she knew she'd catch buyers' attention. She just didn't expect quite this much.

"It all happened so quickly. People want to see it 24/7," Hostettler said of her condo development, the Park at Melrose Heights at 410 Rosedale Ave.

The development is located on an emerging stretch of Nolensville Pike between I-440 and the Tennessee State Fairgrounds. Prices start at $95,000 for a 550-square-foot studio residence and go to $179,900 for a 950-square-foot two-bedroom condo.

Many inquiries come from people discouraged by the cost of renting an apartment, she said. The average monthly rent in Nashville is $1,040, according to rentjungle.com, a website that tracks rental rates in different cities.

"They are people who are shocked by rent but aren't ready to own a house yet. We're hundreds of dollars cheaper and you own it," said Hostettler.

Builders jump in

Other builders have taken notice of the demand for affordable homes. At Berry Farms, the new community being developed along I-65 on Franklin's south side, Regent Homes is offering condominiums from $154,900 to just under $200,000. That's well below the average price for a condo in Williamson County, which was $239,325 in July, according to the Williamson County Association of Realtors. The average price for a house in Franklin was $458,164. Regent's condos range from 632 to 1,094 square feet.

In southern Williamson County in Spring Hill, Regent Homes is offering townhomes in the Woodside subdivision at prices starting at $159,900. In fast-growing Nolensville, townhomes in the Burkitt Springs subdivision start at $187,900.

Josh Stanley looked across the Nashville area before finding an affordable place in Burkitt Springs.

"You can drop a massive amount of money in Nashville and live in something like you had right out of college," he said.

He was able to find a 1,611-square-foot townhome with 2½ baths and a two-car garage at a price he could afford.

"I felt I had the opportunity to live in the house people dream about but not pay the dream-house price," said Stanley.

Regent Homes President David McGowan said municipal planners are encouraging developers to build affordable homes so buyers are not forced to move farther and farther into the suburbs.

"The old saying was, 'You drive until you qualify for a house.' Now the cities have woken up," said McGowan.

Like Hostettler, McGowan said demand is strong for affordable homes.

"We can't build them fast enough," he said.

Prices draw attention

That's been Beazer Homes' experience in Brentwood, where the company is building 25 smaller, more affordable homes in the Owl Creek subdivision on Concord Road. The 2,300- to 2,500-square-foot homes start at $359,900.

That's about half the average price for a home in this city north of Franklin, which according to the Williamson County Association of Realtors was $765,000 in July. The typical new Brentwood home is larger than 4,000 square feet.

Sales are brisk even though construction won't get underway until September, said Beazer Vice President Tom Rothrauff.

"We have nine sales out there and we haven't even broken ground," he said.

Brentwood officials encouraged the company to offer smaller houses for downsizers and empty nesters who might otherwise move away from the city, said Rothrauff. The lower prices are also attracting attention.

"That's the big draw, something in the $300,000s in Brentwood. Where else are you going to do that?" he said.

Owl Creek will also include 60 larger estate homes ranging from 2,600 to 4,200 square feet. Prices will start in the $400,000s.

Hostettler, the developer of the Park at Melrose Heights, expects the first sales to close at the end of September. HND Realty, her family's real estate business, has already taken reservations for 23 of the 46 condos in the first phase of the development. Two additional phases are under construction.

She believes the surrounding neighborhood is becoming Nashville's next hot spot, similar to nearby neighborhoods like Wedgewood-Houston, Eighth South-Melrose and 12South.